Job Displacement, Reemployment, and Earnings Loss: Evidence from the January 1984 Displaced Worker Survey. Research Report Series RR-86-18.

Podgursky, Michael; Swaim, Paul

Job displacement represents a serious labor market problem affecting a broad spectrum of the labor force. A study used data from the January 1984 Displaced Worker Survey, a supplement to the Current Population Survey, which analyzed patterns of job displacement, the post-displacement reemployment, and earnings experience of displaced workers. The study sample was limited to 9.5 million workers 21 to 60 years of age, formally employed in full-time jobs. Using econometric models of reemployment and post-displacement earnings, the study found the following: (1) displacement is widespread; (2) displacement rates are lowest in the Northeast and highest in the Midwest; (3) Black and Hispanic workers are overrepresented among displaced workers, whereas women are underrepresented; (4) displaced workers tend to be younger and have less formal education; (5) two-thirds of workers displaced in 1979 were reemployed by 1984; (6) displaced workers with more formal education are more likely to return to full-time employment; (7) reemployment earnings nearly match those on the old job; (8) a minority of displaced workers experience a large reduction in earnings capacity; (9) more educated workers have smaller earnings losses; (10) displacement results in loss of group health insurance coverage; and (11) most displaced workers are young but 15.9 percent are 50 years or older. There is a need for labor market assistance programs, targeted on the minority of displaced workers likely to face reemployment difficulty and reduced earnings potential unless assisted. (Notes, 26 bibliography entries, 12 tables, and 5 additional tables are included in this report.) (NLA)